Home Depot reported fiscal fourth-quarter sales and earnings that topped Wall Street's expectations Tuesday, providing further evidence that the housing recovery still has legs.

The retailer meanwhile hiked its dividend 29 percent to 89 cents per share, and announced a $15 billion repurchase program.

Home Depot shares were recently up 1.4 percent in premarket trading, as investors shook off the company's full-year 2017 earnings per share estimate of $7.13. Wall Street had been expecting Home Depot to forecast full-year earnings per share of $7.17.

"Our focus on providing localized and innovative product selection, improving the interconnected customer experience, and driving productivity resulted in record sales and net earnings for 2016," Craig Menear, chairman, CEO and president of Home Depot, said in a statement.

The home improvement chain has benefited from a stronger economy and rising home values, which have encouraged shoppers to invest in their homes. Even as the company faced tough comparisons from the prior-year period, analysts expected it to perform better than the broader retail space due to this ongoing shift in consumer spending.

Indeed, the company's fourth-quarter comparable sales growth represented an acceleration from the prior quarter, even as it was up against a 7.1 percent increase from a year earlier. During fourth quarter 2015, the unseasonably warm weather allowed contractors and homeowners to continue working on outdoor projects through the winter.

In the period that recently ended, Home Depot's U.S. comparable sales rose 6.3 percent. Both the number of transactions and the amount spent per shopper increased 2.9 percent.

"There really is a moat around the home improvement category that protects it from online competition," Oppenheimer analyst Brian Nagel told CNBC. "The other big piece is... this is an area of demand growth within retail. People are spending on their homes."

For 2017, Home Depot expects both revenue and comparable sales to rise 4.6 percent. Though its earnings outlook was a bit shy of Wall Street's expectation, Nagel said it is likely conservative.